As Bethlehem Steel took off in the mid-1900s, so did affordable housing, with thousands of modest twin homes and the occasional brick single popping up throughout the city to accommodate the plant’s employees.
There was once more than enough affordable housing for Bethlehem’s working class, but in recent years, not so much. Even as more apartment buildings are developed throughout the Lehigh Valley, many of those units are out of reach for low- to middle-income workers.
A new affordable housing task force in Bethlehem is hoping to change the trend by offering incentives to developers who incorporate affordable housing into their plans. The task force plans to make recommendations to City Council in the next couple of months on how to accomplish that goal.
Renters make up nearly 1 in 3 households in the Lehigh Valley, yet 57% of new rental units cost $1,000 or more per month, according to the latest statistics from the Lehigh Valley Planning Commission. Additionally, 1 in 3 area households are cost burdened, meaning they spend more than 30% of their income on housing every month.
More specifically, 51% of renters and 24% of homeowners in the Lehigh Valley are cost burdened, according to the statistics.
Since 2014, projects encompassing 887 apartment units have gone through Bethlehem’s approval process, but none is considered affordable housing, city officials said. Some of those units have yet to be constructed.
“We can’t deny there is a crisis in Bethlehem, in the state and in the country,” said Bethlehem City Councilmember Grace Crampsie Smith, who started the task force.
Crampsie Smith, who works as a counselor for Easton Area School District, noticed more of her students over the last five years becoming homeless and transient. That’s when she began reading about the lack of affordable housing for middle-class workers in America and decided to see what the city could do for its residents.
Bethlehem’s task force started meeting in November. The group includes 10 members, with representatives from the city, Lehigh Valley Planning Commission, Community Action Committee of the Lehigh Valley and two local developers.
The task force is also looking at what other cities are doing.
Crampsie Smith traveled to State College and the Lawrenceville section of Pittsburgh, both of which have adopted inclusionary zoning ordinances that require developers to offer a share of new units at rates affordable to lower income individuals and families, or to contribute to a fund so that public or private officials can build affordable housing.
Bethlehem already has some tools at its disposal to encourage developers, including waiving recreation fees — which can be significant for large developments — and occasionally waiving utility fees, Darlene Heller, the city’s director of planning, said during a recent Community and Economic Development meeting.
The city also adopted a workforce housing incentive in 2012 that allows developers to apply for a density bonus if they are developing 20 or more units and agree to incorporate affordable housing, but to date no developer has taken the offer, Heller said.
In addition to considering inclusionary zoning, other new incentives on the table include waiving parking requirements.
“Sometimes it’s the parking commitment that limits the number of units or sends someone to the zoning hearing board for relief,” Heller said.
The city is also looking at allowing increased building heights should a developer agree to include affordable housing units and permitting accessory structures, which currently aren’t allowed in many city zoning districts. Officials also want to provide more design flexibility and projects by right so fewer developers have to go before zoners, which costs time and money.
“What we feel is most important is a tool kit of what we can do to make housing affordable and appealing for developers to make housing that’s more inclusionary,” Crampsie Smith said.
Officials in the Lehigh Valley’s other cities, Allentown and Easton, have also been looking at options for creating affordable housing options.
Allentown Councilwoman Ce-Ce Gerlach last year spearheaded the creation of Allentown’s Commission on Homelessness, which recently put forth a number of strategies for addressing housing insecurity.
Allentown is also undergoing a comprehensive update to its zoning ordinance. Council last year formally recognized the need for a greater supply of affordable workforce housing, and requested a consultant consider how the city can incentivize and/or require developers to build more.
Allentown’s Vision 2030 comprehensive plan, adopted in late 2019, calls for the city to consider creating an affordable housing overlay to strategically increase housing density in areas with transit access.
It also encourages the city to establish an affordable housing fund with revenue generated via developer impact fees and real estate tax transfers, among other things, and to enable more residential property owners to build accessory dwelling units.
In the coming years, Allentown will explore the feasibility of an expanded community land trust with a nonprofit partner. Such trusts own land in perpetuity, but share increased property value with people who build or maintain homes on the land.
Councilmember Joshua Siegel has also said he’s interested in seeing the city explore social housing (city-managed rental housing). During a discussion last week on a proposal for a village of tiny homes for individuals experiencing homelessness, Siegel said the city should consider earmarking 10% of future annual property tax growth for affordable housing initiatives.
Easton’s task force, which started meeting last year, is considering an affordable housing overlay district that would allow for increased building height and reduced setback requirements, making it economically more feasible for a developer to include affordable units, said Stephen Nowroski, Easton’s director of planning.
Such overlay districts would also ensure that affordable housing is spread throughout the city and not concentrated to one area.
Mayor Sal Panto Jr. also is trying to allocate funds so the city can build affordable housing to sell to moderate income individuals at a price they can afford.
“We don’t have an area defined yet, but because of the cost of construction, you would want to build it in a single area, like one block, to keep expenses down,” Nowroski said.
Easton has seen a boom in high-end apartment buildings lately, but Nowroski said he can’t think of many that include affordable housing as part of the proposal. The Black Diamond mixed-use development is one development currently underway that would bring 55 affordable apartment units and a retail component to Easton’s South Side.
A lot of proposed initiatives, however, take years to develop and face hurdles.
It’s been difficult to find parcels big enough to accommodate the size of project that would be needed to include affordable housing, and still be lucrative for the investor or large enough to offer a tax incentive through a nonprofit, said Alicia Miller Karner, Bethlehem’s director of community and economic development, during last week’s meeting.
In addition, construction costs are soaring. The price of lumber more than doubled over the last year to an all-time high, reflecting strong demand for construction, home remodeling and pandemic-related problems limiting production, a report from the Associated Press said.
Local developer Dennis Benner, who sits on the Bethlehem Affordable Housing Task Force, said rising costs have presented a particular challenge to him.
Benner is working on Skyline West, a $15 million, 50-unit luxury apartment complex at 143 W. Broad St. No affordable units are planned for the development.
One way to incorporate affordable housing would be to allow for taller buildings with more units so that it’s economically feasible, Benner said. He owns multiple properties in Bethlehem’s South Side, but grapples with how to develop them because he said the city’s Historic Commission, an advisory board, routinely recommends against approving taller buildings.
“Government has to come to grips with density. That’s not just in Bethlehem, that’s everywhere,” Benner said. “Government wants everyone else to fix the problem, but they don’t want to face the reality of what’s needed to be able to do that.”
In State College, it took took four years to develop an inclusionary zoning policy, borough Planning Director Ed LeClear said. The borough of 4 1/2 square miles is heavily influenced by Penn State’s student body, which has driven up the cost of housing.
The ordinance, adopted in 2011, requires developers putting in multifamily housing to either incorporate affordable units into the building, pay a fee in lieu to go into a fund for construction of affordable housing, or build affordable units off site.
A developer recently chose to put in 12 stories of student housing and build another four stories of affordable housing on a different lot, LeClear said. By comparison, a typical market-rate apartment in the student building is $1,000 a month, while the affordable units range from $450-$650 per month.
The borough has accumulated more than $3.5 million toward affordable housing projects since the ordinance was adopted in 2011, thanks to the fee in lieu. The money has gone toward supporting housing nonprofits and first-time homebuyer assistance. The money also recently helped two housing nonprofits complete an eight-unit affordable townhome, LeClear said.
Since its inception, LeClear estimated, the inclusionary zoning has led to the creation of 100 affordable units either by the public or private sector. By contrast, State College has seen 4,000 student beds come online in the last few years.
“There’s definitely been some challenges,” LeClear said.
Borough officials are revamping the ordinance, looking for ways to encourage more developers to pay the fee in lieu rather than constructing affordable units because it gives the borough more flexibility.
The ordinance is very specific about the income levels to which the apartments can be rented. That’s led to some apartments remaining vacant for a time over the years.
It’s also a challenge to monitor affordable units to make sure the families that live there meet the economic requirements. LeClear estimates the borough has charged private developers about $100,000 over the last 10 years to help alleviate the administrative costs.
Despite some bumps in the road, there’s been few challenges to the zoning since it was adopted 10 years ago.
“Here the ordinance is constructed in such a way that it works economically for developers,” LeClear said. “It’s designed to give additional units to developers so when they build an inclusionary unit they also get another market-rate unit on top of that.”
Morning Call reporter Andrew Wagaman contributed to this report.
Morning Call reporter Christina Tatu can be reached at 610-820-6583 or ctatu@mcall.com.
